Life Sciences Dominate at Wharton Competition

The Wharton School of the University of Pennsylvania held its 12th annual business plan competition on Wednesday. Eight finalists were selected from the 231 teams that applied.

Cortical Concepts took the grand prize of $20,000 cash, and $10,000 worth of in-kind accounting and legal services, for its plan to sell a device that would make spine surgery safer for patients with osteoporosis or weak bones.

Stephanie Huang, a first-year medical student at the University of Pennsylvania, described the so-called Cortical Anchor device as a kind of “drywall anchor” for the spine. She and her teammate Jason Hsu came up with the concept as undergraduate bioengineering students at Johns Hopkins University.

The device would be used, Ms. Huang said, in surgeries that require segments of the spine to be stabilized with screws and rods. Such procedures can fix broken backs and alleviate pain from herniated discs when bones are healthy. But, Ms. Huang explained, patients with osteoporosis who need these surgeries are at risk of having the screws loosen in their backs. When that happens, they must endure expensive, painful revision surgeries.

About 100,000 people each year in the United States who have osteoporosis and need spinal fixative surgery would benefit from the Cortical Anchor, said Cortical Concepts’ chief of operations Nicolas Martinez, a student in the Biomedical Engineering master’s program at Johns Hopkins.

Each Cortical Anchor would cost $400, said Mr. Martinez, noting that comparable alternatives can cost upward of $1,000. “Besides saving elderly patients a lot of pain,” he said, “we could save the health care system $7,000 to $10,000 per case or about $700 million per year.”

In their deliberations, judges highlighted the fact that to become operational, Cortical Concepts would have to achieve various patent protections and Food and Drug Administration approvals. But they liked the simplicity of the solution, and they also lauded the fact that the team obtained external validation from orthopedic surgeons at Johns Hopkins. Several judges joked that it was difficult to choose a winner among this year’s group without a patent attorney present.

Josh Kopelman, a Wharton alumnus and managing director of First Round Capital who has judged at this competition for several years, noted that only 15 percent of this year’s applicants but 75 percent of the finalists were in life sciences. Wharton has had a streak of biotech winners in recent years, but the competition has also served as a launch pad for companies selling everything from tacos to anti-microbial, refillable water bottles.

Second prize of $10,000 cash and $10,000 in business services was awarded to NanoLab, a company offering a portable diagnostic device that can tell in 15 minutes if a patient has AIDS, cancer or heart disease and that is 20 times more sensitive than existing diagnostic tools.

NanoLab’s team leader, Michelle Gaster, an M.B.A. candidate at Wharton, said the company’s diagnostic tool uses technology created and patented by her twin brother, Richard Gaster, an M.D.-Ph.D. candidate at Stanford. It involves magnetic sensors, and reads protein concentrations in blood or saliva to deliver results.

NanoLab plans to make money less by selling the device than by selling the disposable “sticks” used in it. The company is far from market ready and plans to use its competition money to continue legal and laboratory research, and to compete again, including at the Stanford Social E-Challenge, for grant money to develop the product.

Wharton’s third-place winner, R2R Therapeutics, is developing a new form of antibiotic drug that will fight hospital-acquired infections that are resistant to antibiotics. In his presentation, R2R’s chief executive, Ben Rhee, said that his wife had suffered from a hospital-acquired bacterial infection. The company’s drug, still in a pre-clinical stage, would attack the outer membrane of bacteria, unlike existing antibiotics, which work on the inner mechanisms of bacteria.

Maxine Gowen, president and chief executive of Trevena, Inc., a privately held drug discovery and development firm, said that while she was “amazed to see a group of plans balanced between therapeutics, diagnostics and devices,” she believed most of the student start-ups she judged had significantly under-estimated the amount of time and money it would take to get their products to market.

She also said these considerations can pose a challenge, even for seasoned entrepreneurs.

See The Prize’s guide to coming business plan competitions. And here’s how to win a competition.

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